Member Info for Fr.Jack.Hackett

Looking into the Marathon mine and SSW involvement (I not certain with the info but its what i can see):
the mine is possibly behind MT in development as they have stated no financial agreement in place yet (MT has the Sinosteel contract).
SSW already have a 19.3% stake - and have rejected the offer to take this up to 51% - if they did exercise the option the following costs would be evoked (for the additional 31.7%):
To make following payments:
(i) exercising the back-in right by paying to Gen Mining three times the amount not previously funded by Sibanye-Stillwater and which resulted in dilution below 20%
(ii) agreeing to fund the capital costs estimated in the Company’s Feasibility Study dated March 25, 2021, multiplied by 31%.

I not spend time looking into i)
Item ii) capital costs are listed as C$665m so they would pay C$871m.
For a stated NPV of C$1070m(at 6% discount & metal price US$1750 / AISC $809) maybe SSW are being prudent in not taking the option (for 31.7% to pay C$871m but has present value of about C$340m) and maybe looking for other opportunity elsewhere maybe where AISC a little lower (below $500 maybe)
Not certain with all the info above as have not dug deep - but its what I can see.

https://www.globenewswire.com/news-release/2021/07/21/2266730/0/en/Generation-Mining-maintains-operatorship-and-majority-control-of-Marathon-Project-as-Sibanye-Stillwater-confirms-it-will-not-exercise-ownership-increase-right.html

At last - some more definitive information on existing projects/mines for comparison.

It appears from the mining weekly article that the Marathon mine is in a similar status to Monchuntundra (they state "the project's time has come to be developed...") which helps in comparison.
They stated NPV based on 6% discount is C$1070m. When using their data - I get similar NPV (C$1055m) as expected.

So - applying above parameters into the MT proposed mine (but using the lower AISC of US$350) outputs the following NPVs of the mine (I leave in CAD dollars for direct comparison):
NPV - MT operating at 130koz = C$543m
NPV - MT (plus flanks) operating at 1000koz = C$9324m
- I think the figure C$9324m will keep me in DRINK for a while and also buy Mrs Doyle a new tea cosy - however I will still revert to conservative valuations based on discounts ranging between 20-30%.

Robert,
I think using future Pd prices from coinpriceforecast.com gets me half way to your range (which I certainly can argued for) but also I would need to apply a discount of at least 10% as well - and I think for the MT Flanks this is not feasible (at least until it is operating).
One other item to get us to your value - could be a bidding war - but I think that is something for a future discussion after an offer has been presented (others come and gazump - could be happy days).
The only other item up my sleeve to get us there is that the deal does include the JV as well as MT. I have a feeling it will not (also i cannot yet put a price on the JV - but bidders have more info from the EUA data than I do) - but I am not excluding it at all - as the recent RNS stated :

'However, after conclusion of the joint venture with Rosgeo ("Rosgeo JV") in which Eurasia will gain a 75% equity stake in nine PGM and battery metals assets (four of which are post Russian Feasibility Study with state approved reserves) with a total of 104.6Moz of Platinum equivalent ("Pt eq") Russian Code reserves and resources in the immediate vicinity of the Company's Monchetundra Project on Kola (as announced on 26 March 2021), the Company has now received several proposals including a proposal from a credible party for the potential acquisition of substantially all of Company's assets. The Board has decided to focus on this potential asset sale'.

For me the words " . .AFTER conclusion of the joint venture. . " and " . .the Company HAS NOW received several proposals. . " opens the door to the fact that some proposals and also the credible party have only come on board because of the JV assets as well (could the creditable party be a Japanese consortium maybe!?).

Let me know if any of the above is included in your £3-£6. If not let me know your parameters and I will see if can also get to similar figures.

I think Agricore is under the impression that it's WK only being sold.
From all the data in the recent RNSs it has to be at least MT (which includes the MT Flanks).
Even John Meyer from SP A implies this is the case - that's why 'massive divi'.
I therefore expecting anything between 75p - 140p.
It may be the whole Kola assets sold - however I think EUA can develop the JV assets further (update resources into reserves where considered necessary and establish EPCF contract etc) before selling them on. It be like mini MTs being sold off in a few years time.

I think its 68% ownership for WK.

d-macca,
unfortunately with a DCF anything over 10 years starts becoming insignificant - so until EUA makes a statement to raise WK estimated annual production higher than the 64koz/year - any increase in the amount of resources at WK (the estimated 43% increase) is difficult to reflected in the DCF.
I have considered discount of 10% for WK as it is operational (and i am conservative and would not lower this). Based on this I cannot get WK worth much more than about 5p/share (even with 20 year DCF at 10% it is 7p). EUA need to raise the annual production above 64koz to make a difference. In fact 5p/share for WK is higher than the ACF update NPV.

As for Monchetundra - it is estimated at 1000koz/year - which therefore gives the NPV of between 75p to 140p. Again higher than ACF update.

Agricore,
I think the general thoughts relayed by EUA BOD is that Monchetundra (2m oz mining licence with EPCF for 130k oz/year in place) plus the Monchetundra flanks (15m oz approved exploration) will be sold. This is mainly palladium.
Discount cash flow will provide net present value for this mine ranging from about 70p to 140p depending on using discounts of between 30% down to 15% (I generally use 20% for Monchetundra and 25% to 30% for the flanks) based on combined total mining of 1000koz/year. Above is based on 80% EUA ownership of both Monchetundra and Flanks.

As for WK (note - EUA owned 64% of WK) - again this is may also be part of the sale but using EUA data of 64koz/year (mainly platinum) this operating mine is much smaller (I consider WK NPV worth about 5p/share today using a lower discount of 10% as it is an operational mine) and therefore I would not considered this is the only asset being considered for sale based on the company RNS dated 12 May 2021 which stated 'including a proposal from a credible party for the potential acquisition of substantially all of Company's assets'. Sale of WK alone is to small to justify the above statement in the RNS.

Above is based on about 10 years DCF but with $2k for palladium on Monchetundra and $1.3k for platinum for WK (you used the reverse). I have not included the mainly platinum based JV as I like to think EUA will develop these further through similar EPCF contracts before then selling on - maximise the assets.

Littleredrooster if yo get less than £1 - your pocket is not picked if not full company sale.
Maybe the anticipated full MT sale or company sale is not to all our benefit!
Maybe it is BOD plan to sell 50% of MT and maintain ownership of the remaining 30%.
The buyers (which I am sure will include Japanese consortium and maybe AA or NN) can have the fun of building/operating the mine & processing plant.
- this leaves EUA to concentrate on what they good for - identifying within 2 years the cream of the other platinum JV assets and then turn them into new future MT type assets for similar sale.

So - based on my previous figures (Pd @ $2600 +1% increase/year, 25% discount, 1000koz/year, AISC $350/oz)
- NPV for 50% MT = £2b
If the EGM resolution is passed next week - then the whole of that £2b can be issued as special dividend (74p/share) and the company knows it also has the assurance and ability (if required) to raise cash to develop the JVs.
All long term share holders will also receive annual dividends of about 15p/share when operating 1000koz/year based on above figures (EUA ownership now 30%).
If using Coinpriceforecast.com future prices (Pd = $4500/oz in 10 years) - then this shall 40p+.

This also allows DS to getdown with the blockchain metals venture as a parallel using his £300+ million from the special dividend whilst maintaining big EUA involvement.

One point to note - in the NPV calculation - I have not taken into account it will be a few years from now before production - but hay - its friday and I am off for DRINK - I am sure the Japanese consortium will make up for any shortfall whilst securing access to the assets for the next 20 years.

I like to think something like the above is the reason for the FSP taking so long - and I would also like to profit from these assets annually.
In addition - I have searched for any suggestion from experts that PGM future prices will drop - but been unsuccessful - can someone help me here!!!!

Thats what I used in my calculation provided earlier today - FRIGHTENING (if you need to buy palladium in next decade), ELDORADO if you are owner of a palladium or platinum mine coming into full steam over the next few years.

The higher divs stated are based on the free cash flow in the later years (8+years) if metal price follows the coinpriceforecast.
The mcap stated (£2264m - £4529m) are estimated value in three years time.

As i mentioned - it is difficult to use this 104moz figure in future cash flows - that's why i provide my minimum value for company NPV. It can only add to the already large figures I calculate - especially if use the coinpriceforecast futures.
I think multiples of the 130koz contract with Sinosteel is a good starting point - but I have not seen any details of ore grade etc - so it is difficult - as you dont know how much ore to process.

Latest review of my figures for WK and MT based on Pd & Pt price $2600 & $1300/oz with two metal price futures of:
1) based on 1% price increase/year 2) based on the futures from COINPRICE
( see https://coinpriceforecast.com/palladium )
I have used calculation based on 2700m shares - this may be higher.

West Kytlim (68% owned) based on 64koz/year now operating (using 10% discount):
NPV (based on 10 year cash flow) and share price and expected annual dividends
1) £150M (SP= 5.5p) and annual divs approx 0.75p
2) £300M (SP=11p) and annual divs range 0.75p - 3.22p

Monchetundra (80% owned) split into two - lower discount for the existing Sinosteel contract (but still no revenue for 2 years):
MT future operation based on 130koz/year and 20% discount:
1) £390M (SP=14p) when built in 2 years it be worth £611M and annual divs approx 5p
2) £822M (SP=30p) when built = £1285M and annual divs range 6p - 20p
MT flanks operation based on 870koz/year (to make total 1000koz) using 25% discount:
1) £1523 (SP=56p) when built in 3+ years then worth approx £3611M and annual divs approx 35p
2) £2915 (SP=107p) in 3+ years worth approx £6910M and annual divs between 43p - 136p

So - value the share price:
1) 5.5 + 14 + 56 = 75.5p (with 1% metal price increase)
2) 11 + 30 + 107 = 148p (lets hope they have access to coinpriceforecast.com)

My preference - sell 1/2 of MT and give special dividend between 33p - 53p now and then in three years company valued between £2264m - £4529m depending on the metal price futures used (and dividends between 25p - 81p).

In addition - the JV will also add value which EUA have 75% - but difficult to use - so above figures are therefore minimum!!!

God bless you Mac - Hymns to my ears

DRINK !
It’s nice to join you all. There's lots of discussion on the company worth which ranges share price from 42p to 250p/share. The only item creating this range can only be what discount to apply.
Reviewing Monchetundra only - over 18 years for both the Monchetundra West Nitts/Loip plant and also separately the flanks:
- ore grade of 2.4g/tonne (2.02g Pd equivalent + and a little extra for the other elements).
PLEASE - Let me know where the errors are.

2M oz - WN&L areas - based on construction work for 1.3M tonnes/year process plant (cost $176M).
- generating approx $150M free cash flow when full production next year - very optimist for next year (@$2K/oz x 1.01% annual increase)
Calculated SP NPV (@discounted):
34p (@7%), 28p (@10%), 21p (@15%), 17p (@20%), 14p (@25%), 12p (@30%)

13M oz - Flanks - based on construction work for additional 12M tonnes/year process plant (cost $850M).
- generating app $1100M free cash flow when full production ($2K/oz x 1.01 annual)
Calc SP NPV (@discounted):
187p (@7%), 145p (@10%), 124p (@15%), 72p (@20%), 53p (@25%), 41p (@30%)

I have seen data using 7% discount - go-on, go-on, go-on, go-on
But consider the following discounts more reasonable (location risk factor needs to be considered)
W Nitts& Loip areas : 15% (construction fully funded - less risk)
Flanks : 25% (still much to do including construction contracts etc)

Company worth = 21+53 = 74p.

My preference (if I was 30 years younger) : we not sell - we mine - and generate annual dividends of 30p/share for the next 15 years starting in two years - and company share price reaches 300 - 350p.
Reality - the BOD have to negotiate a fecking good discount rate to sell DRINK ! GIRLS ! - otherwise I put my wellies on and join them mining.
I think buying-accountants would not consider using discount as low as 15% for assets in Russia and I suspect are arguing now about it being 20% or 25% and Dmitry & UBS need to FECK ARSE to get it lower.

As for the rest of the ore surrounding the site (25m oz) - this becomes insignificant in todays net present value as it will not generate any value for a decade or so (but guess used as a carrot).